(1) It is the intent of the Legislature that physicians providing services in state institutions meet the professional standards of their respective licensing boards and that such institutions make every reasonable effort to assure that all physicians employed are licensed, or will become licensed, in this state. When state-licensed physicians cannot be obtained in sufficient numbers to provide quality services, the licensing requirements in chapters 458, 459, and 460 to the contrary notwithstanding, persons employed as physicians, osteopathic physicians, or chiropractic physicians in a state institution, except those under the control of the Department of Corrections on June 28, 1977, may be exempted from licensure in accordance with the following provisions:

(a) No more than 10 percent of such persons shall be exempted from licensure during their continued employment in a state institution. Those persons who shall be so exempted shall be selected by the State Surgeon General. In making the selection, the State Surgeon General shall submit his or her recommendations to the appropriate licensing board for a determination by the board, without written examination, of whether or not the person recommended meets the professional standards required of such person in the performance of his or her duties or functions. The criteria to be used by the respective board in making its determination shall include, but not be limited to, the person’s professional educational background, formal specialty training, and professional experience within the 10 years immediately preceding employment by the state institution.

(b) Those persons not exempted pursuant to paragraph (a) shall not be required to obtain a license from the applicable licensing board in accordance with the provisions of chapter 458, chapter 459, or chapter 460 prior to October 1, 1981, as a prerequisite to their continued employment as a physician, osteopathic physician, or chiropractic physician in a state institution. Each such exempted physician shall have been certified to the department by the appropriate licensing board as eligible for admission for examination in this state. A licensing board shall not certify to the department as eligible for admission for examination any person who has been adjudged unqualified or guilty of any of the acts enumerated in the disciplinary provisions of the applicable licensing law.

(c) Each unlicensed physician employed by the department shall work under the direct supervision of a licensed physician.

(2) No person subject to the provisions of this section shall, by virtue of continued employment in accordance with such provisions, be in violation of the unauthorized practice provisions of chapter 458, chapter 459, or chapter 460 during such period of employment.